A 2018 study by Deloitte and the Manufacturing Institutepredicted that U.S. manufacturing would have 2.1 million unfilled jobs by 2030. In July 2021, the Department of Labor (DOL) Job Openings and Labor Turnover Survey (JOLTS) showed 889,000 unfilled manufacturing jobs. I tried to find out how many of these unfilled jobs are skilled vs. unskilled, but nobody I talked to at the DOL had any idea. In fact, I couldn’t find anyone in government or industry who had any idea what kinds of manufacturing jobs are going unfilled.
So, I decided to call some manufacturing associations to see whether they knew. Harry Moser of the Reshoring Initiative thinks that the unfilled jobs are 25% white-collar jobs and 75% blue-collar production jobs.
Greg Jones of the Association of Manufacturing Technology thinks it is 75% highly skilled jobs and 25% unskilled. He also believes that apprentice programs should be reduced in hours and be competency-based.
Bill Padnos of the National Tooling and Machining Association thinks that most unfilled jobs are middle-skill jobs and that many require apprentice training. But many companies do not want to invest in long term apprentice training, Padnos says, because they don’ believe they’ll get a good return on investment, and they also don’t want to certify journeymen because the employees would have the skills to shop for better jobs. Padnos said 70% of his members are shops with less than 40 employees and cannot afford the time or money to invest in apprentice training.
My assumption is that if a good percentage of these jobs are highly skilled, then we will need advanced or long-term training like apprentice training. However, it appears that the manufacturing sector is not investing in apprentice, training. I have been following the Office of Apprenticeship training’s website since 2001 and the total annual number of registered apprentices in manufacturing has dropped from around 20,950 in 2001 to 15,510 in 2020. Meanwhile, apprenticeships in other sectors like construction are growing.
Skilled Worker Shortages Are a 3-Pronged Problem.
1. Entry-level workers. According to the Deloitte/MI survey “These are the jobs that do not require technical know-how or industry knowledge, such as team assemblers, production work helpers and hand-held tool cutters and trimmers.” They say that manufacturers are willing to pay $15.50 per hour, but that “applications are not pouring in.” It is a problem because new workers without experience can get a job at Amazon for $18 an hour starting pay with up to a $3,000 signing bonus. Wages are going up in many service industries, and $15.50/hour may not be enough to interest a Starbucks employee to make the switch.
2. Semi-skilled workers. These are jobs like CNC machine operators, welders, drill press operator, assemblers, grinders machine operators and tenders, which require classroom and hands-on training that can take several months up to one year.
3. Highly skilled jobs. Although apprentice training is not growing in U.S. manufacturing, many industries still need journeyman workers. Penn United in Cabot, Pa., is a good example of a company with successful apprentice training. They have 90 apprentices in training today and need more. They believe that to truly become a productive machinist, students must learn all the manual machining skills first before learning CNC. Their journeyman machinists become proficient in 28 different skills and are capable of operating a wide variety of machine tools. They also have the ability and skills to work in other departments of the factory and are far more productive than specialist CNC machinists.
Penn United also believes in “competency-based training,” in that people coming from high school and vocational school programs will get credit for learned skills. Workers who complete the required skills on the journeyman checklist before the four years of training are up can also receive their certification earlier.
The 2021 skills gap report also focuses on smart manufacturing and the 4th Industrial Revolution. It says manufacturers must transform the world of work using artificial intelligence, advanced robotics, automation analytics, cloud computing, wireless communication, big-data analytics and the IoT. But the report doesn’t say anything about how much training will be needed to accomplish the digital revolution. If manufacturing is having trouble finding entry level workers and investing in the training of semi- and advanced-skilled workers, how will it train people for the digital revolution and transform the world of work?
A January 2020 training survey by the Manufacturing Institute shows that the average number of hours of training, per employee, among their members is 27.7 hours per year. and for new employees it was 42.9 hours per year. The training survey also shows that only 32% of members have apprentice training programs. The study says that “75% of industrial organizations identified reskilling the workforce as important or very important for their success over the next year, but only 10% said they were very ready to address this trend.”
So, it appears that the training needed to accomplish the 4th Industrial Revolution is not going to happen.
The Economic Policy Institute says that the passage of President Joe Biden‘s infrastructure and reconciliation bills would create 556,000 new manufacturing jobs. It looks like the skilled worker shortage may get a lot worse before it gets better.
Strategies Used for decades
Instead of investing in long-term training, multinational corporations have been trying to solve the skilled worker shortage with stopgap measures:
- Hiring H-1B foreign visa workers: These visas are used mostly for engineers and in the high-tech industries and are limited to 85,000 new jobs per year.
- Outsourcing: Moving production and jobs to low-cost countries.
- Automating: There has been a huge investment in automation such as robots, packaging machines, and automated production lines. But not enough workers can troubleshoot, operate and maintain the automation, which has added to the skilled-worker shortage.
- Buying services: There are not enough tool and die and mold-making shops in the U.S. today. Corporations buy these services from foreign companies.
- ·Poaching trained workers: For many years, corporations have been stealing trained workers from their suppliers by offering higher pay and benefits
But these strategies are not enough to keep U.S. manufacturing thriving.
From my interviews with leaders of manufacturing associations, I have concluded that despite the need, many manufacturers are unwilling to fund long-term training programs and instead want short-term training.
Montez King, executive director of NIMS, the National Institute for Metalworking Skills, said that most manufacturers tell him they want short-term training tracks that are “stackable” along a particular career path. King responded with what he calls “short-track” training that is designed to train workers one role at a time. He said NIMS’ Smart Training Solutions is focused on roles, not occupations. Montez makes the point that there are not enough skilled workers to hire, and manufacturing companies are faced with training entry-level employees on the job, with short-track training to get them productive as quickly as possible.
The short-term approach will probably work for entry-level workers but it doesn’t answer the multiple skills needed for tool and die, mold making, advanced machining or all of the maintenance skills needed to troubleshoot, repair, operate and maintain automated production lines using robots and palletizers.
The Deloitte report says 2.69 million manufacturing workers will be retiring, so more training is probably the only real answer left. It would really help if the Department of Labor could determine how many of the 889,000 manufacturing workers needed were highly skilled semi-skilled and unskilled, so industry leaders would know what kind of training is needed.
There have been enough surveys in the last 30 years about the skilled-workforce shortage. It is time for manufacturers to face the music and invest the money in substantial training.
Michael Collins is the author of The Manufacturer’s Guide to Business Marketing and can be reached at mpcmgt.net.